Stocks To Trade Ex-dividend This Week From January 31- February 6

Concept of ex-dividend revised

Ex-dividend date is the date before which the shareholder intending to receive the said dividend shall apply for the or buy the shares. On this ex-dividend date, the price of the stock gets adjusted for the dividend pay-out. The date is determined by stock exchanges who notify it, while the record date is announced by the company announcing the dividend pay-out. Usually the record date falls one business prior day to the record date.

How company's stock price is adjusted on the announcement of dividend?

After the dividends are declared, the stock price of the scrip is reduced by the extent of the dividend amount. Say as in the current case, Mastek which has declared an interim dividend of Rs. 7 for the fiscal year 2022, its price on the ex-date which happens to be today should have reduced in price by Rs. 7. But the stock last at around 9:24 am as on January 31, 2022 traded higher by 2742.5 per share.

This is as the dividend dole out is no longer the part of the company. This is in fact in line with the overall positive momentum in IT shares.

Stocks to turn ex-dividend this week

What should be factored in other than buying stocks declaring dividend?

Other than higher dividend yield, fundamentals of the company are of high importance. Further, there can be two takes on such companies doling out dividends, one is that they mature business in their line of business or another view point is that they are better managed entities as they are pre-decided on the fact that they have to dole dividends these many times in a year. These companies in fact tend to offer steady and stable returns over the course of the investment period.

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